Tesla Motors Inc Waits On New Jersey Governor

Tesla Motors CEO Elon Musk tangled with New Jersey Gov. Chris Christie last year, accusing him of a “backroom deal” after his company’s work with the state’s motor vehicle agency was blocked by auto dealerships. Now about a year later, Musk needs Gov. Christie’s signature to get a bill allowing Tesla to sell vehicles directly to consumers in the state signed into law.

Tesla looks to change the law

At the time of the dispute with Musk, which Christie called “complete crap,” the governor essentially said the right way for Tesla to win the right to sell vehicles in his state was by going through the state legislature. And that’s exactly what Tesla has done.

According to Matt Friedman of NJ.com, the New Jersey State Senate has passed a bill legalizing direct sales of vehicles in the state. The bill now heads to Gov. Christie’s desk, and he has 45 days to act on it. A spokesperson for the governor reportedly told the website that the bill “will be reviewed.”

A legal exception for Tesla

If the governor looks past his personal spat with Musk and signs the bill into law, Tesla will be able to open two more showrooms in addition to the four it already has open. The automaker had been selling vehicles from its showrooms until auto dealership organizations opposed the sales, fearing for the franchise dealership model that’s in place.

The bill only allows manufacturers of zero-emission vehicles, that the Motor Vehicle Commission licensed before Jan. 1, 2014, which includes Tesla. In fact, Tesla is the only automaker that fits into that mold, which essentially makes the bill offer an exception only to Tesla.

Tesla will be able to open more showrooms

The automaker is also required to open a service center in the state, which it did in December. Also the bill allows for only four dealerships in the state. Tesla already had two showrooms in New Jersey, although employees were banned from selling the company’s vehicles at those showrooms even though they could show them off. The state allowed the showrooms to remain open while the bill was pending. If Gov. Christie signs the bill, then Tesla would be able to open two more.

Tesla faces similar battles against auto dealership associations in other states. The company recently won another victory in Georgia where the state’s House of Representatives passed a bill that would allow up to five dealerships for direct to consumer sales of cars. Tesla had already been selling cars there but was limited to selling no more than 149 cars. The new bill would dump the cap on the number of cars Tesla could sell in the state.

As of this writing, shares of Tesla Motors were down 0.52% to $194.69 per share.